For Amazon the price is right.

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Let’s face it, the economy has sucked for the last 3 years. Why else would Hyundai have grown into one of America’s best selling car brands? It’s just this year the economy is dinging the top rungs of the ladder. Hard. And it’s not trickling down, it’s pouring down.

Marketing has always been about the 4 Ps (Product, Price, Place and Promotion). Most marketers rarely concern themselves with the price P. Though they spend some time with Product and Place (the sales channel) they focus mainly on Promotion. Well, when the economy sucks price becomes very important. And when price is important the cost of goods going in to the product are important. The entire supply chain is important and manufacturers view with a close eye suppliers, efficiencies, headcount and margins. It creates a thinning of the herd, as it were, which isn’t a bad thing long term.

Amazon reported its best ever December. Why? Because it is a price and value leader. Its cost of goods is low thanks to volume, it doesn’t have to promote, shopping is easy and people are confident in the brand. As more people get hooked on shopping Amazon, it will be hard for them to go back. When the price is right, people spend.   Peace!